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Memphis Tennessee Bankruptcy Blog

Stop phone harassment from credit card companies

Circumstances beyond your control may have forced you into financial difficulty. Believing the circumstances to be temporary, you may have used credit cards to pay your bills, becoming saddled with intractable debt in the process. At Jimmy E. McElroy & Associates, we understand that many people in Tennessee prefer to explore options other than bankruptcy, choosing to file only as a last resort. To that end, you may have negotiated a repayment plan with your credit card company. Once you and the card issuer reached an agreement, you might have reasonably assumed that that would be the end of the harassing phone calls. 

Unfortunately, this may not be the case at all. Even after making repayment arrangements with a credit card company, some people still receive annoying phone calls from card issuers requesting payment. According to FindLaw, federal law places limits on phone calls from creditors in the interest of preventing harassment. However, the government's definition of what constitutes harassment may not match yours.

Does filing for bankruptcy provide any benefits?

Financial stress may have you feeling hopeless about the future and your ability to live debt-free, but fortunately, there are options to help you regain control of your situation. Bankruptcy often gets a bad rap from many people in Tennessee, but the reality is that while it does affect your credit and other aspects of your financial reputation, it can also provide a fresh start as you implement changes to have more control over your finances. 

Consumer Affairs has shared a list of some of the reasons why filing for bankruptcy can actually be beneficial for you. These include the following:

  • Your credit cards and any card-related debts are made obsolete. 
  • You will no longer receive incessant phone calls from creditors and collectors who are requesting that you pay your debts.
  • You can avoid depleting important savings and retirement accounts.
  • You can immediately turn your focus to rebuilding your credit and overcoming your financial past. 

What happens to your credit score after bankruptcy?

You may be considering bankruptcy to break free from your debt. But you may be hesitant due to fears of what it will do to your credit score. While it is true that filing bankruptcy will impact your credit report, allowing your debt to go to collections may be even worse. 

There are many misconceptions about bankruptcy and credit that prevent people from filing. In the long run, declaring bankruptcy can be the decision that brings you to better credit. Here is an analysis of the impact of bankruptcy and best practices for restoring credit.

What is unsecured debt?

While the national and global economy continues to be relatively strong, financial burdens are still everyday realities for many residents in Tennessee. If you find yourself cringing every time another bill or statement arrives, you are far from alone. One thing you might be starting to consider is pursuing debt relief via a bankruptcy. Before you make this choice, however, it is important to assess not only the amount of your debt but the type of debt you owe. Understanding this will help you choose the right path forward.

As explained by The Motley Fool, there are two primary forms of debt: secured debt and unsecured debt. A secured debt is something that is attached to or related to a particular asset. The asset essentially acts as collateral for the debt. If you cannot repay the debt, the lender may be able to seize the collateral in exchange for payment. Car loans and mortgages are common examples of secured debt.

A call for bankruptcy reform

People in Tennessee who struggle to stay on top of their debt know how stressful this situation can be. Regardless of the reasons that contribute to a person's inability to pay bills and other debts, there should be a way to get help and be able to start over. For many consumers in the United States, a Chapter 7 bankruptcy or a Chapter 13 bankruptcy may offer this chance. For others, however, they may not even be able to afford a bankruptcy, precluding them from getting the very help they need.

ProPublica reported recently that the problem of affording bankruptcy has come to the forefront of some recommendations made by the American Bankruptcy Institute. The last time major reforms were instituted to the bankruptcy laws in the U.S. was in 2005, some 14 years ago. Some believe that the changes made at that time hurt people in low income brackets. Now, the ABI is trying to push changes forward that would provide the ability for more people to take advantage of debt relief via bankruptcy.

Is it really impossible to get rid of student loans?

If you are currently thinking about filing for bankruptcy in Tennessee, you were probably disappointed to hear that you were still liable for student loans. However, according to Forbes, this is not always the case. Forbes is clear that a discharge of student loans during bankruptcy filings is rare, but it is nonetheless a possible outcome.

In fact, before 1976 it was fairly easy to get rid of your student loans. Then, as more people took on student loan debt, and as more people continued to default, the government put rules in place to protect creditors. The first major update to the rules prohibited discharge of student loans until five years of repayment. That soon became seven years.

How predatory lenders prey on bankruptcy filers

Tennessee residents who have completed Chapter 13 bankruptcy should be aware that are lenders who are looking to take advantage of people who have previously filed for bankruptcy. One of the major signs that you may not be dealing with a reputable lender is that you are not asked in detail about your previous credit history. However, there are other ways to tell if a lender who does not have your best interests at heart is trying to entice you into signing a dishonest loan deal.

Many predatory lenders use confusion as a tactic. When you look at a contract from a dishonest lender, you might scratch your head at some of the provisions. According to U.S. News and World Report, malicious lenders tend to fudge contract details like the loan fees you have to pay, the length of the loan, the APR, any penalties you might incur, whether interest rates can be capped, and the possible changes the lender could make after you have signed the contract.

Do you qualify for Chapter 7 bankruptcy?

According to FindLaw, up until late 2005 bankruptcy judges could use their discretion to decide whether a debtor qualified for Chapter 7 bankruptcy. As a result, the majority of bankruptcy filers chose to file for Chapter 7 even if they were fully capable of repaying their debt under a Chapter 13 repayment plan. To weed out filers who can afford to repay some debt, all states, Tennessee included, have adopted filing criteria for Chapter 7.

First and foremost, to qualify for Chapter 7, you must meet the income criteria. If your income is equal to or below the state's median, you may be eligible for Chapter 7 bankruptcy. However, if your income is above Tennessee's median family income, you must prove you meet additional eligibility standards.

Key facts about an automatic stay

Bankruptcy is a tool that can assist various individuals in certain financial strains. While it was once looked down upon by many, filing for bankruptcy is becoming more acceptable amongst various groups of people.

An automatic stay is a component of the bankruptcy process that can be helpful in relieving the stress of bill collections during proceedings. Understand a few important aspects of this special tool.

Rebuilding credit should be a focal point after bankruptcy

When people hear the word "bankruptcy," they often associate it with negative consequences. However, for many people, filing for bankruptcy can be the beginning of a fresh start and an opportunity to redevelop their financial foundation to prepare for a successful future. After the dust has settled and a person's bankruptcy is filed in Tennessee, their focal point should be on rebuilding their credit. 

A person's credit score plays a significant role in whether or not they are able to secure financial assistance in terms of loans. It can also play into their ability to secure an affordable interest rate on various types of insurances. Ultimately, poor credit can prevent people from being able to make large purchases such as a car or home. Because bankruptcy does disrupt a person's credit and appears on their record for some time, their primary focus, once their bankruptcy is finalized, is to begin rebuilding their credit and taking measures to avoid unnecessary debt from consuming their financial stability again. 

*We are a debt relief agency.
We help people file for bankruptcy relief under the Bankruptcy Code.